The IGN Data Hub - Nov 22, 2000

Many Dot Coms Lack Staying Power
A new report shows that Internet startups are now closing at the rate of about one a day. The figures bring clarity to the endless announcements of young companies shutting down, some of which launched amid great fanfare only earlier this year. Across Europe and the U.S., 130 Internet companies have folded since the beginning of the year, with 21 in October alone. In November, the rate of closures exceeded one a day, with 21 closures in the first half of the month alone, according to a study from Webmergers.com. Webmergers estimates 8,000 jobs have been lost in the bloodbath, but other studies put the losses even higher. In October, 5,677 jobs were cut in the dot-com sector, up 18 percent from the 4,805 layoffs in September, according to a report from Challenger, Gray & Christmas.

Wait! Not All Is Gloomy for Dot Coms
Forget the gloomy news you just read. Inter@ctive Week reports that 50 companies have managed to generate an astonishing $1.66 billion in Internet-based revenue, proving that gloom and doom isn't the whole story when it comes to dot com companies. Indeed, they put together a list of the top 50 companies earning online revenues.

Australian Online Business Not Booming Yet
Australia may have one of the highest Internet penetrations in the world, which Jupiter Research states as 40 percent. Nonetheless, Internet commerce Down Under lags behind. Jupiter analysts suggest this lag can be attributed to a lack of market development, as well as the Australian market's limited scale. In order to succeed, businesses will need to leverage the inherent benefits of online commerce by shifting their business models to include targeted marketing and deeper relationships with consumers.

Online ad spending by Aussie companies, for example, lags behind that of companies in other nations. This year, Australian companies will spend abut A$70 million (US$35 million) or 0.5 percent of total online advertising expenditures. Companies in Canada, which has a 42 percent online penetration, contributed 1.7 percent of all online advertising dollars--three times that of Australia.

"The status of online advertising and commerce is typical of the Australian market, where reluctance on the part of consumers and businesses has dampened the revenue potential that such high online penetration offers," said an analyst for Jupiter Research, Australia. "Combined with the limited scale of the market and the flight of Internet traffic to U.S. sites, online players in Australia face a tremendous barrier to reaching profitability."

The Wireless Internet Is Ready for Prime Time
The mobile Internet and its supporting technologies are rapidly progressing, say researchers with the Yankee Group, but they are still a work in progress, as mobile phone penetration already greatly exceeds PC penetration on a worldwide basis, and is quickly catching up in the United States. The Yankee Group projects there will be more than one billion wireless devices worldwide by 2003. Further, they estimate that more than $50 billion of commerce transactions in the U.S. will be done via the wireless Internet.

"Critics say that mobile operators are not up to it when it comes to data services. They contend that screens are too small, connections speeds too low, and keyboards too awkward to match what we have with the fixed Internet," said Keith Mallinson, senior vice president of Wireless/Mobile. "These prophets of doom are missing the point. Strict comparisons of the current state of the mobile Internet to the fixed Internet ignore the uniqueness associated with mobility; for example, location, personalization, and voice features. The mobile Internet will evolve to offer valuable services and applications that utilize these unique capabilities."